Follow Us:
Thursday, February 20, 2020

Sensex plunges 518 pts on lack of big bang moves

Massive profit-booking across sectors.

By: ENS Economic Bureau | New Delhi | Published: July 9, 2014 12:54:40 am

After having rallied strongly over the last 7 trading sessions to cross the 26,000 mark on Monday in a pre-Budget rally supported by foreign institutional investors, the domestic markets witnessed a fall of 2 per cent on Tuesday following absence of any major announcement in the Railway Budget.

The Sensex at the BSE witnessed its biggest intra-day fall in ten months as it dipped by 518 points to close at 25,582 and the wider Nifty fell by 2.1 per cent to close at 7,623 points. There was a broader correction in the markets and the mid-cap and the small-cap indices too fell by 3.6 and 4.2 per cent, respectively. Also, firms with businesses linked to the rail sector, witnessed a sharp decline of up to 20 per cent.

While Kalindee Rail and BEML fell by 5 per cent each, BHEL and Texmaco Rail fell by 8.2 per cent and 19.8 per cent, respectively. Others to lose include Concor (7.1 per cent), Kernex Microsystems (4.9 per cent) and Titagarh Wagons (5 per cent).

Most of the companies depend only on Railways for their revenues as they supply wagons and other items. In the absence of an announcement on such expenditure by the government, these stocks went in for a correction.

As the rail Budget reflected on government’s financial limitations and its efforts to raise funds, the stock markets weakened. While the foreign institutional investors ended the day with a net inflow of Rs 422 crore in the Indian equities on Tuesday, the domestic institutional investors emerged as net sellers and sold equities worth a net of Rs 400 crore. Market experts feel that absence of any big announcement on projects led to a fall in rail stocks and even the broader market.

“The Budget was about operationalising Rs 5 lakh crore worth of old legacy projects which were languishing as no focus was there on execution of these projects. It was this absence of any big-bang announcement that led to a sharp correction in equity markets,” said Ritesh Jain, CIO, Tata Mutual Fund.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.